2017 Car Tax Regulations explained

Posted on: 29th Feb 2016

In just over twelve months’ time the governments reformed Vehicle Excise Duty (Car tax to you and me) plans will come into place. These price increases may have an effect on when you want to buy your next vehicle. With 2016 plates nigh, it might be time for you to cash in and buy or lease a new car instead of putting it off until 2017 and being left with a higher tax bill.

We’re here to bring you up to date with the latest government reforms so have all the facts in front of you to ensure you make the best decision for your situation.

The announcement was made in the 2015 budget and is due to be implemented from April 2017 and will be enforced on any car purchased after that date. A year on from paper tax discs no longer being enforced we still await the introduction of the governments car tax clamp down.

The current VED laws have basically been ‘outdated’ by manufacturers who have seized on the opportunity for cheaper tax for their buyers by slashing CO2 figures. Having realised manufacturers are burning a hole in the exchequers pocket, the government have stepped in with a new set of guidelines to ensure they no longer have to front the bill.

As things currently stand new cars have to emit between 121-130g/km (Band D) before any annual road tax is charged. From 2017 this will no longer be the case and cars registered after April 1st of next year will accrue an initial tax-charge for the first year which will be determined by a fully reassessed tax structure.

Upon paying this initial one year fee, when approaching the second year, car owners will then be split out into two sections: those that have a zero-emissions car who will not be charged VED and £140 for every other car. The government will then add an extra charge of £310 for every car costing surplus of £40,000 for the first five years of ownership.

The cars that will be hit hardest by the new implementation will be those new-popular eco-friendly cars which have ‘bypassed’ the current VED system. Those cars that have been exempt from tax previously will now cost the owner £1,380 over a ten year lifespan. The way to avoid this charge is by buying your car before 1st April 2017!

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